YOUR BALANCE SHEET

The standard mileage-deduction rate for cars used for business purposes has been increased from last year's 20.5 cents a mile to 21 cents for 1985. You may claim the standard rate simply by keeping track of business mileage, without having to maintain more complete records of fuel and maintenance expenses.

Of course, the procedure is not quite as simple as the preceding paragraph might lead you to believe, which should come as no surprise to anyone who has been filing tax returns.

The 21-cent rate applies only to the first 15,000 miles of business travel in 1985: above that amount, the standard allowable rate drops to 11 cents a mile. Further, your deduction is limited to 11 cents a mile for all travel after the car has been fully depreciated. A car placed in business service after 1979 is considered fully depreciated after 60,000 miles of business travel has been claimed at the standard rate.

When adding up the annual mileage to determine if the car has reached the 60,000-mile limit, count the actual number of business miles claimed each year, but only up to an annual ceiling of 15,000 miles.

That's because a reduced rate was allowed each year for miles above 15,000 a year, rather than the standard rate.

Using the optional standard rate for business mileage is a lot easier than the regular method, but it may understate your actual costs and result in a lower deduction.

You may find you come out ahead using the regular method, which involves keeping track of all car expenses -- fuel, oil, maintenance and repairs, depreciation, insurance, car tags, etc. -- and claiming a proportionate share of the total, based on the ratio of business miles to total miles driven during the year.

Regardless of which method you use, you may add tolls and parking fees (related to the business use). But fines for traffic violations may not be included as an expense.

If you use your own car when providing donated services to a qualifying charitable organization, the standard mileage rate for 1985 has been increased also, from last year's 9 cents to 12 cents a mile. But the travel deduction for expenses related to medical care remains at 1984's rate of 9 cents a mile.

Q: We own several thousand dollars' worth of E bonds purchased from 1975 through 1979. We have gotten conflicting answers to our question: Do these old E bonds earn the interest rate shown on the bonds or do they earn the same market rate as EE bonds if held for at least five years? My local banker says they do, but two different people at the Treasury Department gave me different answers (one yes, one no). Who's right?

A: The majority rules: Your banker and the "yes" person at the Treasury Department are right. If held for at least five years, old Series E bonds earn the same market-based interest rate as the newer EE bonds (as long as the bonds haven't reached final maturity -- which only applies now to bonds issued before 1946).

Don't be misled by that "five-year" requirement. It doesn't mean five years after purchase, but rather at least five years (actually 10 interest periods) after Nov. 1, 1982 -- the date of the changeover to Series EE and market-based interest.

Q: In your column on March 18 you said withdrawals must be started from an IRA (in accordance with an IRS life-expectancy table) not later than April 15 of the year following the year in which the account holder reaches age 70 1/2. Our bank insists that this is incorrect and that my husband -- who reached 70 1/2 on Feb. 17 -- must begin withdrawals by Dec. 31 of this year. Which method is correct?

A: The bank was right last year (1984), when withdrawals had to start by the end of the year. Beginning Jan. 1, however, the rule was changed; however, the April 15 date is now incorrect also.

The present rule: Withdrawals must begin not later than April 1 of the year following the year in which the IRA owner reaches 70 1/2. Your husband thus has until next April 1 to initiate withdrawals. If the people at your bank won't take my word for it, refer them to IRS Code Sections 401(a)(9), 408(a)(6) and 408(b)(3).